More virtual posts. Last batch, I ended up writing one (so far). Better this time? Maybe; anyway micro-posts are also things.
Hippie macroeconomics. Paul Krugman and Bill Mitchell both object to this Robert Samuelson column in the Washington Post, about how the real problem in economic policy is the if-it-feels-good-do-it macroeconomics of the 1960s. And indeed, it is objectionable. But remember, Christina Romer thinks the exact same thing.
Dedication. My friend Ben Balthaser recently published a book of poems, Dedication, based on recollections of various American Communists from the 1940s and 50s, which I’d highly recommend even if I didn’t know him. It’s great poetry, but it’s also oral history, a bit like Vivian Gornick’s classic book on the inner life of American Communism. It really captures the spiritual appeal of Communism in the first half of the century and the moral heroism of so many people who heard that appeal, and also the almost mythic quality that world takes on in retrospect.
The debt-cycle cycle. Steve Keen’s work on the role of debt in boosting and then constraining aggregate demand is worth some careful attention. I wish, though, that there were more acknowledgement that this is not a new idea, but an old idea coming back into fashion. Very similar debt cycles have been described by Benjamin Friedman (1984 and 1986), Caskey and Fazzari (1991), Alfred Eichner (1991) and Tom Palley (1994 and 1997), to pick just some examples; Eichner, for instance, uses the equation E = F + delta-D – DS (aggregate expenditure equals cashflow plus debt growth minus debt service payments), which seems to me to state the key point of Keen’s “Walras-Schumpeter-Minsky’s Law” in a clearer and more straightforward way.
Free streets! The attempt to put a price on driving into Manhattan a few years ago failed, basically because Bloomberg tried to just cut a deal with the “three men in a room” and didn’t realize he needed to actually build support. But it didn’t help that the way it was pitched, drivers saw it as a punitive restriction on their freedom, when really — as anyone who finds themselves driving in Manhattan should be easily convinced — by far the biggest winners from fewer cars on the road are drivers themselves. I’d go all in on that point, and change the name from “congestion pricing” to “free streets.”
Crotty on owners and managers. In my “disgorge the cash” posts, I’ve usually pointed to chapter 6 of Wall Street as the best statement of the idea that financialization is fundamentally a political project by asset owners to claim a greater share of the surplus from nonfinancial firms. Another good (and more theoretical) discussion of the same idea is Jim Crotty’s article, “Owner-Manager Conflict and Financial Theories of Investment Instability.” Maybe I’ll type my notes on it here.
Okun’s Law. The less than proportionate response of employment to short-run changes in GDP is one of the few concrete empirical laws in macroecononomics. This is usually interpreted as the result of “labor hoarding” and the costs of hiring and firing workers. But it could also be explained by shifts of workers into higher-productivity sectors when demand is high, and into lower-productivity sectors when demand is low — Joan Robinson’s famous example is the person who loses a factory job and ends up selling pencils on the street.
Higgs: meh. I haven’t taken a physics class since my first year of college, but I’m enough of a science fan to share Stephen Wolfram’s disappointment that last week’s Higgs discovery just confirmed the 40-year old Standard Model, without pointing the way toward anything new. Also, just to be clear: It is not true that the Higgs field is responsible for mass in general, only for the rest mass of fundamental particles, like quarks and electrons. Neutrons and protons, the massive particles that make up normal matter, get only a tiny fraction of their mass from the rest mass of their constituent quarks; almost all of it comes from the binding energy of the strong force between them, which the Higgs has nothing to do with.